but the 100 down by 15 points. dax points down by three points. i'll be going to step back? let's get our market open with caroline hyde. caroline: nervousness creeping in ahead of the federal reserve meeting. will they decided to hike the rates? less than one in three believe there could be a rate hike. ahead of that, cautious trading. green.0 edging into the we will wait and see how germany opens. down for three straight days. at the forecast. bullish on european stocks. they could climb as much as 18% over the course of the year. that is the average forecast. thinkingost bullish, it could go up to 440.

that is a rally of 25%. dax opens up. let's have a look at the effect that shanghai has as the moment -- has at the moment. saying china has plenty of room for policy. how to stimulate their economy. the discussions coming from governor kuroda at the moment did a selloff going on in europe. down on the dollar. we saw french cpi lower than had been expected eared -- expected. the on the dollar ahead of fed rate decision. let's get an eye on the stocks showing? we spoke to the chief executive yesterday at frankfurt. are theus car sales gross momentum -- it is going to

remain in china. up 11%. e.on down by 1%. germany utilities need more nuclear provisions. provisions are appropriate. h&m, sales are not looking too good for august. jonathan: airline, good job. just caroline, good job. afterse 100 snapping back . it is early days. it is not early days over in asia. seven, good morning. .ip: good morning we are seeing stocks today mixed across the asia-pacific eared you're seeing stocks moving lower in china. concern of a slowdown in economy. a two-day loss in three weeks. we will watch it closely.

active today, insurers. closely watching japan. the equity sessions seeing gains in the nikkei. with comments -- we have comments from kuroda. keep monetary policy where it is. in the press him conference in tokyo. he is saying inflation expectations in japan flat overall. indicators are rising as a trend -- indicators are rising as a trend. ask -- confidence in the u.s. economy. whether they will do that remains to be seen. 119.79.is trading at

we will watch the currency as boj holds fire. china's strength or what it lacks at the moment. drop on: the two-day the shanghai composite. the biggest two-day drop in three weeks. what is driving toyota? we willing ask the head of global product. nichols.oin hans can you cope with higher rates and a global recession echo everyone debates the feds, citigroup has a bold call for 2016. deutsche bank make shrink its staff by 25%. to japan, and head of the fed september meeting. the boj referring to stimulus after the economy strain last quarter.

in a survey, more than one third of economists think the boj will make a move by the end of next month. brian, the likelihood of a move in october, two people thought it would happen today. a lot more think it is going to happen next month. brian: yes, that is exactly right. after today, we may see a few more join that group. mr. carruthers remarks -- mr. kuroda's remarks are giving them room to push back the target. he has given hints about inflation is flat for now. maybe better further out did he is still saying hopeful signs on the other hand the boj has been clear the risks are out there. they are concerned about exports and slowing growth in china. we are obsessed over the when. what do they buy?

buyn: they have room to jgb's, etf's. they probably try to increase spending on all of those assets. boj officials have said they have nowhere near jgb's have. they feel pretty comfortable and every one of those markets. jonathan: we access over the monetary policy. is there a message coming out of the bank of japan right now that the government needs to do something to help them out? brian: i think it is clear that the government has to do something. is in thes said he middle of the road. we're still waiting for that third era to come. they should be pressure on abe to do more.

we will get more on that in the next few weeks as they put that together. the ball is in his court at the moment. jonathan: brian fowler, thank you very much for running us. we are joined now by julian chillingworth. manage 2.74 billion pounds of assets under management. great to have you with us. we drop below 120 and we try to use that as a barometer to find out what the boj is going to do next. do i need to be looking at what is happening in china? given that china gives -- given that china consumes 20%? julian: as a rule, we are looking to china. to get a clue as to what is happening to the economy globally. strong manufacturer in china. for the japanese economy to prosper, yes, monetary policy is

a good idea. some reform packages. china is key. jonathan: surely we're at the point where monetary policy have been exhausted over in japan. julian: you could argue that. buy many more yen bonds? at the end of the day, the market wants to see a continuation of policy and continuity. it may not be about another big figure. every affirmation -- a reaffirmation is key. jonathan: overweight japanese sits acrossmeone from me and starts talking about economics. it has nothing to do with abe nymex. as much as the backdrop is important, what is crucially important is japan is going

through a renaissance. they have to look toward the shareholder, better corporate government. at the end of the day, making real profits that they can pay out to investors in term -- in terms of dividend flow. many of companies -- many of the companies haven't thought about in years. companies are focused on -- jonathan: many companies are focused on dividend return. i want to take a look at the japanese is is now. hans nichols is standing by with the head of global heart -- global product for toyota did -- toyota. no longer the world's largest carmaker. over to you hans. joined by the head of global sales for toyota.

we got a concept car behind us. what does it stand for? >> it is a codename, but it is a compact cruiser. it is super radical for to yoda. it is breaking the mold -- it is super radical for toyota. it is breaking the mold. it is the fastest-growing segment. we want people to understand we have arrived. it has fantastic potential here in europe. especially the hybrid version. posco when -- hans: when will you release something that i can get my hands on? >> this model will go in production. confirmation today. in geneva, we are going to announce all of the details. we have a new previous updated. preiusave a new

updated. updating -- we have been pushing hybrid. modelsrd to half of our that have a hybrid model are chosen. now.ve a rav4 hybrid we are going habit across the hybrid leaders in europe. -- e are going -- hans: me a picture give me a picture of whe toyota is. >> the targets are still being met. where understand the issues of a slowdown. at 1.1 million.

hans: what about brazil? >> it is difficult for all of us. hans: do you see russia coming back? how bad is it this year? downe mark in russia is 35%. that is a big chunk of business. we are confident, because we are gaining market share. the good news is lexus is increasing and the setting records in russia. we feel there is still a market. midterm, we are positive about russia. theory about your why the luxury car has held up in russia? >> part of that is evil web money still have money -- part of that is the people who have money still have money. the government is subsidizing -- is subsidizing local models.

market stays ok. a little bit less, but ok. hans: you are no can with volkswagen this year. what do your prospects look like for 2015? >> we are trying to do our own thing. we should focus on our own job. we want to beat last year's sales. that will be our challenge. we are trying to do our part here in europe. we are not that excited on volkswagen. -- we are not that fixated on oaks wagon. volkswagen. there is a rate increase, it is going to be minor. there might be a delay. some economists are saying let's get this over with. we have been dragging this forever.

i don't believe it will be so bad. the u.s. market for us is doing well. hans: the u.s. market relies heavily on finance. what's the growth is so strong -- >> the growth is so strong, we are going to be all right. hans: what you see the market like throughout the rest of south america? >> i am not responsible for the area. when you're talking about canada, where i come from, the impact has been substantial. there is a commodities taste issue going on. -- there is a commodities-based issue going on. started sales of mri. i want to make sure your viewers understand the output is a glass of water. i'm going to give you one. you. good to see

>> i couldn't possibly comment on whether i got the short straw. it looks like a lovely car. hans nichols in frankfurt. coming up, it a few weeks away -- a few months away from a global recession. we will hear from goldman sachs top economists after the break. ♪

jonathan: 18 minutes past the hour. the bank of japan refrains from boosting the stimulus. the economist from goldman sachs are among those who project the moves. the yen strengthens. he has been sworn in as australia's six prime minister in eight years. he is a former executive at goldman sachs. giants --ead with with plans in china. >> we see an enormous process underway in china. where convinced that china will continue to grow no longer into digits, but it will grow.

we are getting ready for this. .here is growth which is why in the northwest, -- our plan is to build a budget west of china. spathan: 19 minutes into the trading session. the ftse 100 coming off the back of a three-day losing streak. by .2%.igh biggest two-day drop in three weeks. switch up the board. you -- thatd buys flat. we are an hour and minutes away expected to drop back to 0% inflation. another bank struggling to generate inflation is the bank

of japan. they'll again drops below 120. the boj restraining from adding stimulus. many economists believe they will make the movement's month. -- next up is the swiss national bank. --thursday morning, takes they're are expected to keep rates unchanged. the fed, one of the most anticipated moves this year. thursday, 7:00 p.m. u.k. time. citigroup has a bold call, the bank is predicting a global recession starting next year, led by china. bloomberg spoke to the chief economist. >> china slowing down, very rapidly. i think the outcome, unless there is a rumor act last

a recession in china. we are back with julian chillingworth. julian, reconcile of these two things. a call from citigroup for a global recession next year. someone is going to be very wrong about this. it might hurt. who is wrong? i would say in reality china is slowing. i don't disagree with the comments you made about slowing very rapidly. the authorities have a number of levers to pull. they are selling u.s. treasuries and plugging them back into the economy. turning to the fed, having kept rates at normally low levels will be very keen to begin the

passage of rates upwards. i think it is more likely than not they will do that this year. it will be gradual, but they need to have that in their if the u.s. economy does slow, there is something they can do to stimulate the economy. with a 0% rate, i can do nothing but print more money. jonathan: we have seen credit spreads go wider. if we get the scenario that they're going to -- if they are going to be matched with tighter financial conditions, not just the u.s. or the central banks go on a mix burge -- on a big splurge. how does that go next year? julian: they will look to move toward slightly tighter policy, but not dramatically so. abnormalming out of a time.

this unwinding will be very different other cycles. we won't see a sharp rise as we saw from the fed in the past. jonathan: the charts of the screen, goldman sachs has talked about financial conditions index. racesay it equates to 325 point -- 325 point basis rate hike. trade lower as the financial condition index tightens up. isn't that the trade to get rid of the stocks that have a high rate death? >> we are concerned around the high-yield area. policy,ed does tighten will putsome people them under pressure. i don't think it is going to be quite like the cycles of the

past. i don't think we will see rates rise very rapidly. 3.15 basise to rise , then that is a different matter. jonathan: we have seen that chart of the s&p 500 messed up against the federal reserve balancing sheet. when you look at u.s. equities, i still like u.s. stocks. story, go for.k. the ftse 50. is that now the story over in the u.s.? julian: you want to be more consumer orientated, more the messick orientated. -- more the messick orientated -- more domestic orientated. jonathan: the bond market,

fascinating right now. the guild the market maybe more so. u.k. inflation and what the bank of england may not do. cpi expected to drop back to 0%. it is the 20th month that we are below at 2% target. carney and other members of the mpc, whatbers of the is going on? julian: we are getting deflation. with low commodity prices. it is a boom for western consumers. day, thed of the central banks look at this as a slightly one-off. they're worried that wage inflation is going to creep into the financial system as we get full or employment. you will have underlying pressure for inflationary pushed

higher through wages. jonathan: does that mean we need to -- 1.836%. what have you guys been doing? julian: looking towards the short end, but not aggressively. , 10 years of plus, is slightly expensive. jonathan: julian chillingworth, thank you for joining us this morning. coming up, the passive the crutch. price will fall as a lot of jets hit the market. minutes into the session here in europe. the ftse 100 that flat. -- the ftse 100 dead flat. stay with bloomberg. we are back in two. ♪ sure, tv has evolved over the years.

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call 800-501-6000 to switch today. perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. jonathan: hello and welcome back to bloomberg tv. i am jonathan ferro. 30 minutes into your trading day. let's get a check on the equity markets. the ftse 100 coming off the back of a three-day losing streak. trading pretty flat this morning. the shanghai composite bit close lower, down by 3.5%. the break -- they broke through board, onetch of the pound, a dollar 54. i will give you a look ahead to that inflation data and a couple of minutes it the stimulus that

would comets that today is not coming. i start japanese yen this morning. where are we? 31 minutes into the session. let's get the hot stock movers from caroline hyde. isoline: the best performer a cardinal, up 4%. , 50% growth in revenue. this still talking about targeting of an international bill to be done this year -- international deal to be done this year. stressock has been under . amazon will be entering the u.k. space, unleashing its grocery delivering package. we see a spout in the overall stock price.

rwe is the worst performing stock. this is in the german press, speigel was writing yesterday that rwe, they do not have enough money to cost for the cover of nuclear waste disposal. they are 30 billion euros in short. that their back provisions are appropriate here it speculation that they do not have enough money for nuclear clear up. edf, down by 4%. morgan stanley downgrading them today to underweight. concerns about their earnings per share did -- per share. meanwhile, they're going to keep on spending on investments to curve that storm.

--to curb that storm. jonathan: caroline hyde, thank you very much. stocks have been in the budget airline sector. guy johnson is standing by at the low air congress and london. -- in london. guy: thank you jonathan. i'm joined i alex cruz, the ceo of whaling. group.a part of the iag some of your competitors have a good summer -- had a good summer. did you have a good summer? alex: if you didn't have a good summer, you're not doing something right. guy: how good is the winter going to be? xo winter is long and cold every year. -- alex: winter is long and cold every year. normally a strong summer means winter will be milder.

people want a repeat. they are ready to do business again. more actively after having a fantastic summer. guy: a lot of new planes coming on board. that means you are going to be fighting out a little bit harder. everybody's got new planes. what does that mean? alex: the planes are coming in a standard way. way.g in a staggered the strength of the economy is there will be more travelers. is it rate oftor retirement. some airlines may be slightly overconfident with fuel prices. we can handle a little it more.

let's see what happens. echo when you look at -- guy: when you look at what is happening. you brought up some specialist, what are they telling you? alex: no one should speculate with the fuel price. we know how people have protected their fuel prices. people are hesitating at the moment. there is an opportunity, but we need to be careful. we have seen situations where the low price of fuel has yielded overcapacity situations. to -- sure we continue -- what are you expecting? what you see the european economy doing echo alex: most of the forecast have been positive. they're speaking well of development.

the north and middle europe continues to develop well. if the economy continues to see a decenthould amount of passenger demand continue to develop over the went to. --over the winter here it over the winter. guy: how will it affect your business? you take pastors from one country to another country. does the border issue concern you? at schengen and non-schengen. we hope that they will not be an acting non-schengen measures. otherwise it becomes complicated. guy: how does that happen?

alex: in the past, it has acted as a detriment. people need to continue doing business. here in the u.k., inbound and outbound. ultimately, people may need to get used to doing that over the coming months. everyone is talking about whether or not the fed is going to raise rates. sensitive is in the traveling public here in europe to interest rates? alex: those that make the decisions are looking at the interest of consumers. purchasingthe patterns. peoplequency at which purchase tickets. will i be taking into account the fed is going to raise interest in my next decision?

it looks unlikely, particularly when we are looking at european travel. guy: alex, always good to see you. alex cruz, the ceo of welling. guy johnson, thank you very much. where good to pick up on central-bank policy. here in the u.k. we get cpi data. the year-over-year figure, zero. richard, i try to add up the points and reconcile it with carney, forks. it does not stack up. what is going on with the bank of england. the bank ofhink england is pushing back on dovish expectations. they will like to have some two-way risk in that market. investors are looking at not

only the external environment which is challenging. soft -- a soft patch. we are going to have the latest in a long line of sub target inflation rate readings. we've had week manufacturing. if we look at the brc is saying about sales and target -- in august, they are slowing as well. it is a challenging environment domestically and internationally. jonathan: you nailed the bank of england when you excited them to say china is not offering -- that'sorward, on friday, not the whole -- that's not the view of the mpc. there are people at the bank .hat are worried about china that tug-of-war between market pricing and those from the bank of england.

does market pricing when at the end of the day -- does market pricing win at the end of the day? richard: he will be the first to push back and say there are great concerns, notwithstanding the view that they are trying to downplay china. theink investors look at macroeconomic environment. they look at a fed that may not left off as complete as economists think they will. the market is still not pricing it. you look at that environment and investors are sanguine in terms of early liftoff. another thing to remember is with this string of sub target cpi's, you're good to have the governor writing a letter to the chancellor in november. i would think we might extend

into next year. i find it difficult for the bank of england to raise rates at the same time as writing a letter to the governor, telling him why inflation is below target. jonathan: there are bullish economist calling for a recession in 2016. thank you for joining us. coming up, deutsche bank could be making serious cuts to shanking its workforce by as much as -- to shrinking its workforce by as much as 25%. after the break. ♪

jonathan: almost 45 minutes past the hour. let's get you up to speed. the bank of japan refrained from posting stimulus even after the economy shrank at quarter. economist from goldman sachs are among those who project the move at the banks october 30 meeting did the yen strengthens. malcolm turnbull has been sworn in as australia's six prime minister in eight years. volkswagen is moving ahead with expansion plans in china. >> we see an enormous process

underway in china. we are convinced that china will shortly no grow longer in two digits always, but it will continue to grow in the west. we are getting ready for this. there is still growth which is why in the northwest, we set up a new factory two years ago. our plan is to build a budget car for the rest of china. jonathan: 45 minutes into the session. let's huge up to speed. equity markets in the green. the ftse 100 pretty much dead flat. the dax up by .3%. by 37 points. the shanghai composite, to date drop -- the shanghai composite a two-day drop. euro-dollar, set at 1.13. a weaker euro by 2%.

flat, 45 minutes away from the u.k. inflation data. no firm deal. eu ministers met in brussels to relocating 100or 20,000 refugees, fling war zones in the middle east and africa. negotiations will continue ahead of another meeting set for next month. for more, let's bring in ryan chilcote. today managed to agree on anything? -- ryan, did they manage to agree on anything? ryan: the number of refugees that each eu country will take out of the 100,000. they did agree on quotas for 40,000. on theiled to agree remaining 120,000. they have kicked the can down the road to october 8.

that's when europe's top cops all 28 of them are to get together again, unless of course the chaos that we see in europe. the eu leaders are starting to get ahead of that. they can do away with the idea of reaching unanimity. they can have a qualified majority and say no we cannot convince the czech republic and the hungarians on board. we are going to do this the tough way. we're going to abandon the idea of unity and say we've got a qualified majority. choice tolittle impose and that it there is so much disagreement. , give met responses some specifics about heat -- about how each country is reacting?

ryan: hungry at the forefront. we had the prime minister saying in addition to that fence, because the refugees have been preaching -- have been cutting their way through it. now the law says if you damage that fence, you will go to jail or get deported. it set aside 30 judges to quickly process people that breach the fence. things are getting hot there on the border, particularly with the military involved. refugees can risk their luck. or they can go to another country and try to enter austria and germany. chilcote on the refugee crisis. thank you very much. still to come, we will hear from the world's largest automaker on

how they are being affected by the slowdown in china. here in europe, car sales surging. we will bring that to you after this short break. ♪

jonathan: welcome back. the news from deutsche bank, the bank could be cutting it staff like 25%. according to a person familiar with the matter did there possibly losing 8000 jobs. for more, let's get to making reporter, nicholas cumbre.

how do these plans fit into the plans of ceo when he took over akin july? nicholas: the word cost was so central to his message. he is trying to sustain and knocked down costs. past ceos have try to push down and somehow costs keep creeping up again. and have a net reduction in costs. jonathan: 25% in the headline. it is 8000. the consumer unit is 25%. give me more detail. do we know which departments? knowlas: we do not exactly. we do know the focus will be on the back office.

the nonclient facing jobs. we know that deutsche bank is going to cut assets at its investment bank. there will be those jobs on the line as well. jonathan: comfort, thank you for -- nick comfort, thank you very much. early this morning, the focus was on german business. european car sales surged 11%. it is all about job -- it is all but china. one of the biggest names in it -- and the industry was telling bloomberg tv. >> we see a normalization in china. china will continue to grow in two digits always, but it will continue to grow and the west. >> clearly there is a headwind in the economy which is depressing the confidence and the consumer. every month we are selling

35,000 cars. >> china is the biggest market for the business. factis year is due to the to wait and see where china pans out. jonathan: those were some of the executives for some of the world biggest automakers. the pulse is coming up after the break with francine lacqua. francine, it's got to be a big thing for you. we're going to be live in frankfurt with hans nichols. talking about china. i know he has a clear handle. jonathan: he is offering all of us a car this morning. you know what i'm going to get? a fiat. it's complete. we will talk about the motor show. ofare talking to the ceo

renault nissan. nissan has been trying to sell a lot of cars to china. we have guy johnson. airline the low-cost congress in london. jonathan: who knew that existed? to gettingok forward appearances on bloomberg tv. i try to reconcile the call of citigroup for recession. the fed hike this week. francine: i don't know where we i will be interested to have his take on whether the fed will hike this week. if it stays at this kind of level for six months. jonathan: francine lacqua coming up in three minutes time. do not miss that show. 56 minutes into the trading desk

into trading this morning. .3%.tse 100 down by the dax holding its ground. the dax up by .1%. we are 30 minutes away from uk's cpi for the month of august. 0%, aed to drop back to 20th straight month of lows. look out for that. that is at 9:30 u.k. time. at 10:00, the germany's e w. 1:30, u.s. retail sales coming up at 1:30 u.k. time. that comes before the fed's big decision on thursday. on wednesday night, the interview with ray dalia, the six clock p.m. new york, 11:00 p.m. here in london. that is it for me.

stay with bloomberg tv for the pulse. if you want to talk market, i am on twitter. best of luck for the rest of your day. ♪ .

keepshe bank of japan monetary policy intact. we will have the latest from o'gara. hitting the brakes, we are live in frankfurt talking to a ceo this hour. and deutsche bank is said to be considering losing more than 20,000 jobs, that is 25% of its work force. ♪ francine: welcome. live from